502 Bad Gateway Q3 FY26 Earnings Analysis

- October demand has been very good, especially in passenger vehicles and two-wheelers, indicating positive momentum going into Q3 FY'26. - The company expects Q3 passenger vehicle credit growth to be significantly higher due to good demand for base models. - Two-wheeler demand in October was extremely strong, with expectations for continued good growth in Q3. - Commercial vehicle volumes and utilization have remained good, with only temporary geographic disruptions. - Overall assets under management (AUM) grew 15.74% year-on-year, with a sequential increase of 3.3%. - The company anticipates another 2% additional AUM growth in the second half of FY'26, reflecting stronger demand. - Construction equipment demand is weak due to slow government and local infrastructure spends. - The firm is cautiously optimistic about growth, leveraging increased branch reach across geographies, especially for MSME and vehicle financing.

- The company registered a PAT growth of 11.39% year-on-year in Q2 FY'26 and 7.03% sequentially, indicating steady profit growth. - Earnings per share for Q2 FY'26 stood at Rs. 12.27, up from Rs. 11.02 in Q2 FY'25 and Rs. 11.46 in Q1 FY'26. - For AUM, a 15.74% year-on-year growth was recorded with expectations of an additional 2% growth in the next half-year. - Demand in October and Q3 looks promising, especially in passenger vehicles and two-wheelers, suggesting potential income growth. - Net interest margin (NIM) is expected to stabilize around 8.25% to 8.3% exit for FY'26 with possibilities for improvement depending on cost of funds. - The company plans to maintain its net interest margin while focusing on growth and improved cost management. - Deposit funding targeted around 30% of liabilities, with additional borrowings planned via domestic capital markets or foreign borrowing as needed.

- Shriram Finance has created a subsidiary, Shriram Overseas Investment Limited, to start a primary dealership (PD) business. - Board permission taken for this new business; awaiting Reserve Bank of India (RBI) approval to commence full-fledged PD operations. - Currently, the subsidiary is engaged in government securities trading while awaiting PD license. - No other explicit mentions of current or planned capex or strategic investments detailed in the transcript.

- Shriram Finance plans to borrow around Rs. 1,000 to 1,500 crores through NCDs every quarter as part of normal borrowing needs. - Additional borrowing needs may be met through bank borrowings or offshore funding opportunities. - The company aims to maintain public deposits at around 28-30% of liabilities and plans to raise remaining funds via domestic capital markets or foreign borrowings. - No mention of immediate equity fundraising; focus is on lowering borrowing costs and optimizing liability mix. - Management is cautious about raising large resources in the current quarter but will explore cheaper borrowing options in coming quarters.

The transcript provided from Shriram Finance Limited's Q2 FY'26 earnings call does not specifically mention details about the current or expected order book or pending orders. The discussion primarily focuses on: - Borrowing costs and sources (NCDs, foreign borrowings, bank borrowings) - Segmental disbursements in various vehicle and loan categories - Asset quality and stage-wise slippages - Market demand trends in commercial vehicles, passenger vehicles, MSMEs, and other segments - Liquidity position and credit cost - Subsidiary plans for primary dealership business No direct commentary on order book size or pending orders was found on page 15 or surrounding pages of the transcript.